Defensive termination is a form of implicit

cross licensing A cross-licensing agreement is a contract between two or more parties where each party grants rights to their intellectual property to the other parties. Patent law In patent law, a cross-licensing agreement is an agreement according to which two ...

patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention."A p ...

or other

intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...

rights. Consider a case where company A licenses patent A to company B. One of the conditions of the license agreement is that if company B should ever sue company A for infringing one of company B's own patents, such as patent B, then Company A can terminate the license to patent A. Thus company A would be able to counter sue company B for infringing patent A. This is a strong incentive to prevent company B from suing company A for any future patent it might receive after it has licensed patent A. The

World Business Council for Sustainable Development The World Business Council for Sustainable Development (WBCSD) is a CEO-led organization of over 200 international companies. The Council is also connected to 60 national and regional business councils and partner organizations. Its origins d ...

, for example, has a defensive termination clause built into its "Eco-Patent Commons". The Apache 2.0 License also includes a defensive termination clause.

References

Strategic alliances Patent law {{law-term-stub